As it looks to grow its portfolio primarily along the West Coast, Classic Hotels & Resorts is renovating its latest acquisition in the coastal California village of Carmel – the Hotel Carmel, slated to open March 31, 2016. The 27-room hotel, formerly The Dolphin Inn, will undergo a US$2.5 million renovation and be the fourth property in the company’s California Coastal Collection.
Classic Hotels & Resorts, which had purchased the 75-room La Playa Carmel in 2011, saw the Hotel Carmel “as an opportunity to expand locally,” John Grossman, managing partner of the Phoenix, Arizona-based company, told HOTELS in an exclusive interview.
“While the Hotel Carmel itself would be too small as a one-off investment, having the La Playa Carmel to support it made it a much more attractive proposition,” he said. “We plan to manage both hotels contiguously, to create a great cross-selling platform and now control over 100 rooms in a town with a hotel room moratorium of just 950.”
The company earlier had followed the same strategy a few years earlier with two boutique hotels down the coast in Laguna Beach, where it owns the 70-room Inn at Laguna Beach and the 36-room Laguna Beach House.
Grossman said he expects the average daily room rate for the Hotel Carmel at around US$215 in 2017 and for that number to increase about 6% annually after that.
In terms of future development, Grossman said the company would like to add two or three hotels to its portfolio in the next two years, and it continues to seek new projects in markets along the Pacific coast and in Phoenix. In the pipeline are two hotels undergoing renovation and expansion.
“At our current capacity, we’d probably top out at about 10 total projects, which doubles the size of our current portfolio,” he said. The company owns and manages all of its hotels and doesn’t currently employ any third-party managers.
The Hotel Carmel’s renovation will include design upgrades with rustic-modern décor to its 27 guest rooms and suites, half of which feature fireplaces. The hotel’s public spaces will be redesigned to include a courtyard garden with fire pit and Jacuzzi. The project team, led by Classic Hotels & Resorts, includes interiors by Bishop Pass Design of Los Angeles.
“Hotel Carmel is a very special project for us,” Grossman said. The design “simultaneously celebrates the town’s historic architecture and distinct characteristics while incorporating contemporary styling.”
Classic Hotels & Resorts, whose portfolio also includes the 744-room Arizona Grand Resort & Spa in Phoenix, is an affiliate of Grossman Co. Properties.